Narrow Results

For the Belt and Road Initiative, “extensive consultation, joint contribution and shared benefits” is the basic principle, and the competitiveness heterogeneity is an important condition for cooperation. Based on the complex network theory, this paper constructs a complex network model of global value chain (GVC) division of labor system by using the Multi-Regional Input-Output (MRIO) table and reveals the variation trend of competitiveness of industrial sectors and economies on the GVC network by the National Competitive Advantage Index (NCAI). The results verify the effectiveness of BRI and help countries along the BRI route to explore their comparative advantages and cooperation prospects with other countries. The research also provides a direction and reference for China to better implement the Initiative.

This paper discusses a possible case for industrial policy with special reference to the two emerging global giants, China and India. It begins with a clarification of the meaning of industrial policy, since not only does the term mean different things to different people, but the traditional and narrow definitions leads to significantly different conclusions than more recent, broader definitions. In the context of definition of the term, the paper also reviews the arguments for and against industrial policy, and discusses industrial policy in the context of globalization, including the evolution of multilateral trading rules. The main arguments of the paper discuss the Chinese and Indian economies, exploring in particular their past experience with variants of industrial policies. The similarities of the "China model" to past East Asian experience are explored, while the contrasts of India's development, and the distinction between liberalization and reform are examined. These two major country cases form the basis for a consolidation of recent conceptual ideas, where effective and successful industrial policy is viewed as part of a social contract, creating a pathway to inclusive growth.

Global value chains (GVCs) have altered the nature of global trade and offer significant opportunities for developing countries to expand exports, access technology, and raise productivity. Recent literature has pointed to a range of underlying characteristics that may drive participation in GVCs. Using a modified factor-content methodology, this paper shows that proximity to markets, efficient logistics, and strength of institutions are among the most important capabilities. However, the paper also shows that each sector has a unique mix of capability requirements. The paper applies the methodology to Southern African Customs Union countries, and demonstrates that, by filling gaps in underlying capabilities, these countries could increase participation in certain GVC sectors.

Understanding how and why economies structurally transform as they grow is crucial for making sound national policy decisions. Typically, analysts who study this issue focus on sectoral shares of gross domestic product and employment. This paper extends those studies to include exports, including exports of services. It also considers mining, in addition to agriculture and manufacturing, and recognizes that some of the products of these four sectors are nontradable. The section on theory presents a general equilibrium model that provides hypotheses about structural change in different types of economies as they grow. These are then tested econometrically with annual data for the period 1991–2014 for a sample of 117 countries. The results point to the futility of adopting protective policies aimed at slowing deagriculturalization and subsequent deindustrialization in terms of sectoral shares, since those trends inevitably will accompany economic growth. Fortuitously, governments now have more efficient and equitable ways of supporting adjustments needed by people who choose or are forced to leave declining industries.

In recent years, there have been several successful examples of government-initiated trade-related policies aimed at developing industries that constitute a country’s comparative advantage. By implementing industry-specific, trade-related targeted reforms (i.e. reducing tariffs for imported equipment, thereby facilitating technology adaptation, providing access to expert consultants to help firms adhere to global standards, and simplifying customs procedures), the respective governments helped firms in nascent industries grow and become more productive.

The purpose of this paper is to contribute to the ongoing debate on government intervention (Lin and Chang 2009) and whether such intervention should be targeted to certain industries or not. Using a sample of 588 manufacturing firms in Eastern Europe and Central Asia (ECA), we find that targeted, trade-related, government policies have a limited impact on the firm total factor productivity. Contrary to the views of proponents of targeted policies, there is a “threshold of economic, legal, and political development,” below which targeted policies do not work in the ECA region and are impacted by existence and effectiveness of corruption.

International trade of goods and services plays an important role in the growth of economies. To make this growth sustainable in the long run, it is important to understand in what goods or services countries have comparative advantage (CA). The present work focuses on the ten biggest developing economies, revealing their CA in the services sector. The main results reveal that India has a CA in computer and information services, Macao, Thailand and Turkey in travel services, China, Hong Kong, India and Taiwan in other business services, Korea in construction and transport services, and Singapore in financial and transport services.

Competition between countries has rapidly increased in the current context of economic globalization. Both indirect competition (through trade) and direct competition (through illegal immigration) can breed social dumping, exerting downward pressure on labor conditions in developed countries. In this paper we show the need for a social clause in order to prevent firms from illegally obtaining a comparative advantage. The adoption of a social clause, based on agreed labour rights by all signatories to ILO Conventions and on the compliance by multinationals, would eliminate social dumping.

Linking labor standards and trade at the multilateral level has received a lot of criticism. Some claim that this is just another strategy to masquerade the protectionist ambitions of developed countries. We believe that it should be adopted at the multilateral level in order to favor an ethical behavior in both trade and investment. This is particularly crucial for less developed countries that have inserted themselves in the international economy.

A balanced analysis of the arguments in favor and against the adoption of a social clause reveals that there is a patent need for an international harmonization of workers' rights regardless of the instruments.

In this paper we assess the current relevance of different sources of international competitiveness. Relative prices, labor costs, and productivity are evaluated as determinants of a country's international competitiveness at the industry level. Working with detailed data on unit values and with industry data on productivity, we empirically implement a MacDougall-type model for Spanish and French trade to Brazil, China, Japan, and the U.S. The period under study is 1980 to 2001 and we distinguish in our analysis between homogenous, reference-priced, and differentiated goods. Our results indicate that cost competitiveness factors are only valid for explaining trade with developing countries while other factors are of importance for developed economies. Overall price competitiveness is of importance, but for differentiated goods, factors distinct from prices seem to determine export success.

This study demonstrates that the HO model proves useful for assessing the competitive factors in the delivery of services. However, further analysis that draws on the modeling framework of microeconomics and industrial organization is required.

An economy may perform better because the firms become more efficient, the industries are better organized, or the allocation between industries is improved. In this paper we extend the literature on the measurement of industry efficiency (a decomposition in firm contributions and an organizational effect) to a third level, namely that of the economy. The huge task of interrelating the performance of an economy to industrial firm data is accomplished for Andalusia.

We propose a new way to locate the comparative advantages of two economies linked by international trade. We construct a competitive benchmark based only on the fundamentals of the two economies: endowments, preferences and technologies. The direction of trade is endogenously determined by a linear program with an input–output core. The factor contents of that trade are compared with factor endowments to test the Heckscher–Ohlin model in the presence of different technologies and preferences. We can also evaluate the gains of free bilateral trade. The model is applied to a customs union between Europe and Canada. The Heckscher–Ohlin factor abundance specialization hypothesis is supported by the data.

India and Bangladesh pursued policies of trade liberalization since the early 1990s. However, due to the differential speeds of opening up, Bangladesh's bilateral trade deficit with India widened substantially over the years. This aggravated the economic and the political tensions between the economies. It has been held that the promotion of free trade between the two economies may enhance trade and hence economic cooperation between them. Against this backdrop, the present chapter proposes a theoretical framework which provides a general equilibrium determination of the commodity pattern of trade and hence locates the comparative advantages of the economies. The empirical implementation of the model considers trade in 25 sectors comparable in the input–output tables of the economies. The study isolates the gains from free trade accruing to either economy. The chapter also explores the pattern of bilateral trade when each economy produces goods by utilizing their own, as well as the other country's technology. The gains from this trading arrangement are also isolated.

This chapter examines the likely pattern of China's food trade in future should China's food trade policy be adjusted to accommodate her comparative advantage. Differing from the common perception that China's overall food sector will follow the path of grain trade and face an ever growing trend in net import, this study has found an evolving pattern of exchanging food for food in China over the last 15 years. The pattern is in part characterized by strong export expansion of selected food products such as vegetables and fruits, aquatic products etc. The economic rationale behind the observation has been examined through a comparison of relative costs among alternative food productions in China and discussion of other potential causes. The potential for China to further develop the food trade pattern and its implications for China's rural economy and the traditional policy of grain self sufficiency are discussed.

An important facet of globalisation is the international fragmentation of production. This phenomenon has been studied for goods and many services but has so far been neglected in tourism studies. In this chapter, we attempt to rectify that by providing theoretical and empirical evidence of various aspects of the international division of tourism production (IDTP). In the theoretical section, we use the traditional Ricardian paradigm to show that the IDTP is a conceivable possibility for tourism and may even be highly likely in a context of rapidly decreasing costs of transport, trade and communications. The three theoretical cases shown here can be interpreted, in a historical perspective, as describing the gradual opening of tourism to international trade in Europe. The empirical section is based on the revealed comparative advantage index of Balassa to study the pattern of specialisation of 36 countries (18 OECD countries and 18 developing countries) in two segments of the tourism product system. Our results confirm that tourism production has been globally fragmented over the period 1980–2006, but that the pattern of specialisation of the two groups of countries evolved differently over time.